The corporate defense bar is excited over the Delaware Supreme Court’s April 14 decision in Pyott v. Louisiana Municipal Police Employees’ Retirement System, No. 380, 2012 (more often referred to as the "Allergan case"). The Supreme Court reversed a Court of Chancery decision that had refused to dismiss a Delaware derivative complaint notwithstanding that a California federal court had previously dismissed virtually the same complaint. The Court of Chancery ruled that it was not bound under principles of collateral estoppel to follow the federal court ruling. It further held that even if it would normally follow the prior court’s decision, it would not in the Allergan case because the California plaintiff had not adequately represented the Allergan stockholders before the California federal court.

The Court of Chancery’s Allergan decision had been widely criticized by counsel for corporate defendants. They pointed to the abuse presented when multiple complaints are filed in multiple jurisdictions over a single transaction. That forces defendants to wage a multistate defense. Thus, if the Allergan case decision in the Court of Chancery had been upheld, defendants feared that even if they won one battle, the war against them would continue on another front. The defendants’ concern led to several amicus briefs filed in the Delaware Supreme Court urging reversal of the Court of Chancery’s Allergan decision.

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